William Hill lifted by gaming machines and online, offsetting cancelled races and football

A strong performance from gaming machines in William Hill's shops, as well growth from its online business, has made up for cancelled horse races and football matches due to the recent severe weather, the company said today.

Fourth quarter retail turnover rose by 8% in the fourth quarter and 4% in December despite the snow and freezing conditions, leading the group to say its full year operating profit would be at the top end of market expectations.

The news has sent its shares climbing 14.3p to 191p, making it the biggest riser in the FTSE 250. Rival Ladbrokes is close behind, up 6.1p at 138.2p. Analyst Paul Leyland at Investec said:

We see continued growth [for William Hill] driven by online and machine momentum, while we believe the over the counter mix is improving. We do not see this reflected in the 8.1 times forward earnings multiple, which continues to factor in decline, in our view. We reiterate buy.

James Hollins at Evolution Securities said this low trading level for the company could attract bidders:

If the shares continue to trade at bottomed-out levels, we could see private equity interest emerge for a group that generates, we think, attractive and solid cashflows from both its retail and online divisions. We retain our buy stance and a 270p target price.